[bheemaiah]

What is the journal entry for Prepaid expense?

[bheemaiah]

What is the journal entry for Outstanding expense?

[bheemaiah]

What is the journal entry for Income received in advance?

[bheemaiah]

What is the journal entry for Accrued Income(Outstanding income)?

[jsu0272n]

For instance if it was insurance the entry would be

Debit insurance expense 2000

Credit prepaid insurance 2000

[ROLCAM]

DEBIT Accrued Income Account.
CREDIT Income Account.

Being outstanding income taken into account.

[ROLCAM]

DEBIT Income Account
CREDIT Accrued Income Account.

Being Income received in advance.

[ROLCAM]

DEBIT Expense Account
CREDIT Accrued Expenses Account

Being an outstanding expense now accrued.

[morgaine300]

If you haven't already, read my last past on last page of:
https://www.askmehelpdesk.com/financ...ry-420910.html

[doi]

what is the journal entry for Outstanding expense?

Before I will answer your question, let me ask you first. What do you mean by outstanding expense? Are you referring to general and administrative expense?

[morgaine300]

I kept these questions in the same thread simply because they are related, which is what you need to learn. Again, learn the concepts behind it. You also need to get that if you only mention the type of thing it is and don't say a whole transaction, there actually is not specific entry.

That is, you can't say "what's the entry for prepaid expense." There is no ONE entry for an account. Accounts can be used in more than one way, so there's never just ONE entry for an account. There are entries for transactions or situations, not for accounts.

When the prepaid expense is paid, it's a debit to the prepaid expense and a credit to cash. When the prepaid expires, it's a debit to the expense and a credit to the prepaid. I think we've already gone into a dissertation about what prepaids are. They are assets until they expire and then they turn into expenses, which I explained in full on the other thread.

Income received in advance is the same concept, except backwards. Instead of you doing the paying, you're doing the receiving. You receive cash for something that has not yet been earned. That's a liability -- you still owe something, a service or a good. So you credit that liability (like Unearned Fees or Deferred Service Revenue or some such), because that increases your liability. And you debit cash.

Later when you have earned any portion or all of that, you debit it back out of the liability account and credit the appropriate revenue account.

The above two are deferrals -- i.e. money happens in advance of the expense or revenue. That's why they work in a similar manner, except backwards.

Accrued (outstanding) expenses are debited to the expense and credited to a payable of some sort. These are expenses already incurred and therefore have to be recognized on the books, but since they have not yet been paid, are still due and therefore a liability (payable). When you pay it later, you debit it back out of the payable and credit cash.

Accrued (outstanding) revenues are the same concept backwards. You've earned something so you must credit the revenue account for it. But you have not gotten paid yet so it goes into a receivable (or what you call debtors). You have to recognize the revenue since it's been earned, but there's no money yet. When it gets paid later, you credit it back out of the receivable and debit cash.

The above two are both accruals, meaning the revenue or expense has already happened and must be recorded, but the cash exchanges hands later.

If you have more questions about this topic, you may keep it in this thread. If you ask about another topic or specific problem, please start a new thread so as to not get all confused with this one!

[morgaine300]

before i will answer your question, let me ask you first. what do you mean by outstanding expense? are you referring to general and administrative expense?

That means an accrued expense. It takes a while to get used to the difference jargon used different places.

[ScottGem]

Please review the guidelines on asking for help with homework that can be found here:

https://www.askmehelpdesk.com/arts-l...board-b-u.html